Does your home insurance policy cover termite damage?

Does your home insurance policy cover termite damage?

The presence of termites in your house can be a cause for alarm for your family’s as well as your home’s well-being. Unfortunately, by the time you spot the termites, they may have already caused significant harm to your property. 

Worse, the average home insurance policy usually does not include coverage for termite damage, which is considered gradual damage arising from negligence or improper maintenance. While you may be able to buy a specialised insurance policy from a pest control agency, dealing with termite damage can be expensive. You need to be particularly careful about termite damage if you are buying a house that was previously occupied.

If you are concerned about the presence of termites, consider getting your home inspected by a pest control expert, ideally before you move in but certainly at regular intervals. Besides helping you fix or prevent termite damage to your home, a pest control expert can also advise on how often you’ll need to take further measures. For instance, you can prevent termite infestation by putting in place a soil barrier or trench around your home, with the soil coated with a termite repellent or poison, which may be effective for a few years. 

You should remember that the methods pest control experts are likely to suggest, such as the soil barriers, are preventative measures and cannot help if termites are already present in your home. You may need to apply the termite repellent or poison directly to the infested areas in such a case.

Again, if your home has been infested, you’ll likely need more than one termite control measure, depending on whether your home has vulnerable areas where timber and water are available near each other. In the event your home is infested multiple times, stronger and more frequent treatment may be required.

What is home insurance coverage for termite damage likely to cost me?

Your home insurance provider will likely not cover termite damage, which leaves you paying for the pest controller to inspect and treat your home, as well as footing the bill for any repairs. Hiring a professional pest control inspector who may use advanced imaging tools to check for termite presence under the floorboards in your home, can cost you between $250 and $350.

This cost varies based on the size of the infestation, the location and construction quality of your home, and the type of treatment and chemicals used. You may have to pay more if you buy an extended warranty along with the treatment. Some of the methods used, with illustrative costs, are discussed here.

  • Termite repellents: You can choose to treat termite infestation by applying termite repellent at the infested spots. This is only a temporary measure as other parts of your home may still be damaged by termites. This may cost you up to $500. 
  • Termite poisons: You can consider using a termite poison which is slower to act but more effective than the repellent as the termites tend to carry the poison back to their colony, eliminating the termites in the nest as well. While termite poisoning will likely put a stop to the infestation in your home, it may not be enough if you live in an area likely to support multiple termite colonies. You may have to pay as much as $700 for treating your home with termite poisons.
  • Termite barriers: You may need to install a treated soil barrier as a preventative measure if your home is infested often. This will likely involve drilling into your home’s concrete slab near, for instance, your home’s outer edge or patio and around pipes. Since this process uses specialised chemicals, it can cost you as much as $3,500, although you don’t have to repeat the process for a few years.
  • Termite baiting stations: Some pest controllers may recommend using an even more specialised technology called baiting stations, which are designed to prevent the termites from growing their colony. You may need to check from time to time if the termites are consuming the bait which contains a growth regulator. These baiting stations are meant to repel termites besides helping you monitor and prevent their growth, but termites may avoid the baiting station by finding other paths to your home. Installing a baiting station and deploying the bait may cost you as much as installing a termite barrier.

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Learn more about home insurance

Does home insurance cover termite damage?

It is unlikely that the average home insurance policy will cover damage caused by termites, mice, or other vermin, which are typically the result of negligence. For instance, water may have seeped from a heater or washing machine and dampened the woodwork in your home, attracting termites. Since termites usually build colonies, you’ll need to deal with the existing infestation and also take preventative steps to prevent future termite damage.

Treating your home for termite damage can be quite expensive, and you’ll likely have to make significant repairs depending on the size of the infestation. You may want to check if your neighbours have also had termite damage issues, and consider taking more long-term measures to keep termites away.  For example, you could install a chemically-treated soil barrier or baiting station, both of which may be effective for a few years. 

Consider inspecting your home  for any leakage or seepage from time to time, especially in the flooring or the outer edges of your home, as a precaution against damage by vermin. You may also want to consider hiring a pest control professional who can inspect and treat your home to protect against termites.

Does home insurance cover tree root damage?

While trees can add much beauty to your property, they can be an indirect cause of damage to your home. For instance, a storm could knock branches off trees on to your roof or windows. A really strong storm may even cause the tree to topple entirely. 

Home insurance may not directly cover tree damage to your house. However, the policy will likely cover the incident, such as a storm, which resulted in branches or uprooted trees falling on your home. You can check your home insurance policy’s coverage for various incidents by reading the insurer’s Product Disclosure Statement (PDS).

You should remember that trees can require regular maintenance, just like the plumbing in our homes. Insurers may check whether the tree, its roots or its branches were rotting due to a lack of care, in which case the damage caused by the tree falling on your home may not be considered accidental damage. Again, if a branch falls on your house while you’re trimming it, you may not be able to claim compensation from your insurer for the damage. If any trees are growing too close to the walls of your home, consider checking that none of the branches or roots is causing any stress to your home, which can result in structural damage.

Do I need home insurance for a home loan?

While home insurance isn’t necessarily a requirement for a home purchase per se, it’s likely that if you’re purchasing a home with the help of a home loan, you’ll need to take out home insurance on the property. Home insurance can be one of the factors required in the pre-settlement documentation for a home purchase, and you may be advised by either the bank or a broker (or both) ahead of settlement.  

Is my home insurance covered for weather damage?

It is important to understand what is covered and what isn't covered in your home insurance policy before purchasing it. One crucial point to consider at the time of evaluating home insurance policies is whether it includes home insurance weather damage cover, and what it actually means if it does.

Typically, the protection afforded by home insurance actually depends on how the home was damaged or affected by conditions. The whole idea behind home insurance is to protect you from loss or damage against an unexpected, sudden event, like a fire or storm. If your home was in the way of a storm and your roof was damaged, which also caused internal water destruction, you may be covered for the damage to the roof and the property. The same holds true for walls or a fence that got damaged in a storm or flood.

However, you may not be covered if the damage occurred because your property was not well maintained and your home suffered a leak. A poorly maintained fence is less likely to be covered by home insurance.

Does home insurance cover rising damp?

If you spot mould formation on the walls of your home, the cause could likely be rising damp. As a homeowner, you are expected to monitor your home for rising damp and the resulting mould damage. If you do have rising damp in your home, the renovation of your walls can cost you thousands of dollars. Worse, most home insurance policies won’t cover you for such repairs, as mould damage is considered gradual damage arising from negligence or poor maintenance. 

In most cases, rising damp is a structural issue which occurs when the damp proof course (DPC) installed in your home is damaged or rendered inadequate. For instance, a broken or leaking storm pipe may result in water accumulating below the floor of your home, causing damp to rise through the walls. Equally, the sub-floor area or the DPC may be obstructed or damaged, for instance, by a concrete slab. 

You will need to hire experts to locate the exact problem and make the necessary repairs. Again, the issue causing rising damp can also result in other problems such as termite damage, which means you may need to act quickly. Remember, your home insurance will likely not cover termite damage either.   

What is a home insurance premium?

Your home insurance premium is what you pay your insurance provider for covering your home under their home insurance policy. It is calculated based on the type of coverage you choose for your home as well as any additional coverage you buy for either your possessions or specific incidents. Your premium can either be paid annually or in smaller instalments. 

Your home insurance policy may cover the total replacement cost, which is the actual expense of rebuilding your home from scratch. Alternatively, it can cover an insured sum, which is a predetermined estimate of what it might cost to rebuild your home. You’re more likely to pay a higher premium for total replacement cover than for insured sum coverage.

Apart from selecting your coverage, you’ll have to figure out your excess, which is the amount you pay out of your own pocket for each insurance claim. If you are okay with paying a higher excess, your insurance premium may be lower. Conversely, if you choose a lower excess, you may pay a higher premium. 

Your insurance premium can also be higher if you live in an area prone to incidents like floods, bushfires, or theft, as insurers are more likely to receive a higher number of claims in such neighbourhoods. 

If you also want to buy insurance for your belongings, a combined home and contents insurance policy may have a lower premium than paying premiums on separate policies for your home and your belongings. 

Does homeowner’s insurance cover electrical problems?

Every home has a range of electrical fittings,appliances and wiring running through the structure of the house. You can face many kinds of electrical problems but, unfortunately, your home insurance policy may not cover all of them. Damage accidentally caused by natural accidents may be covered, as might the repair of motors if you have opted for fusion damage cover. For example, if there’s a lightning storm and your home suffers a power surge which causes a short circuit, any repairs needed may be covered if your homeowner’s insurance contains lightning damage.

However, if any electrical appliances stop working, even a home and contents insurance policy may not cover the cost of repairing the appliance. Also, you should check with your insurer about making any electrical repairs inside your home as that may affect your coverage. 

Usually, in Australia, you need to hire a professional electrician to carry out any inspections or repairs to the electrical system in your home. This can include conducting periodic checks to make sure the electrical wirings are not exposed to seepage, flooding, or attacks by rodents. Consider asking your insurance provider about optional coverage for fixed electrical appliances such as air-conditioners and washing machines.  

Can you transfer home insurance?

When you sell your home, you cannot transfer the home insurance policy to the new owner. The buyers need to purchase a new home insurance policy where the insurer will calculate the premium based on several factors.

The risk of any damage to the home is transferred to the new owners when you sell the property. You can speak to an experienced conveyancer or solicitor to find out more about when the risk gets passed to the buyers in your state or territory.

If you move to a new home

Can you transfer home insurance to a new property if you move to a new home?

Some insurers may allow you to transfer your policy to a new property as long as you meet certain conditions. These include informing the insurance company as soon as you enter into a contract to buy the new home. You may need to pay an additional premium when transferring your existing home insurance policy to the new property.

Is hail damage covered by home insurance?

If storms are among the incidents covered by your home insurance policy, hail damage protection is more than likely assured. While all policies differ based on your needs and what a home insurance provider will offer, some things are close to a certainty. 

Extreme weather events tend to be unpredictable in their severity, but dangerous all the same. You'll never be able to fully prepare for any damage caused, be it lightning, strong winds, rain leading to flooding, or hailstorms, but home insurance can at least provide you with a way to deal with life's unpredictable nature. 

If your home suffers from hail damage, you can file a claim with your insurer. In the event that this happens, remember to take pictures of any hail damage as an insurance adjuster will need to evaluate the impact on your home. Any additional wind damage to your roof will also need to be documented similarly.

You may want to check if your home insurance also covers hail damage to the cars parked on your property, and then file the claim for the total damage caused by the hailstorm. Once your claim is approved, your insurer should offer you either a cash settlement or refer you to a network vendor for the necessary repairs.

Does home insurance cover temporary accommodation?

Seeing your home damaged by a natural disaster such as a bushfire or a hail storm can be traumatic. Unfortunately, sometimes your house may become uninhabitable after such an incident and require major renovation or even rebuilding. In such circumstances, your home insurance policy should cover the cost of temporary or emergency accommodation. 

It's worth checking with your insurer on the coverage limit, as different insurance providers may cover the cost of renting another home for a number of months, though this will vary between coverage cost and insurance provider. However, the maximum coverage will probably run for 12 months. Upon filing a claim, most insurers will likely first ask an inspector to confirm that your home is too damaged to live in, and subsequently cover the cost of temporary accommodation after that. 

You could also need temporary accommodation because the local council or other governing authority may order an evacuation in anticipation of a problem or disaster. In that instance, you should check if your insurance provider will cover the cost of accommodation at such a time and, if so, how you can file a claim in such cases. If you are a pet owner, check if your home insurance policy covers the cost of temporarily housing your pets elsewhere.

Does home insurance cover asbestos removal?

If you’ve inherited or purchased an old home, the house may have been built using asbestos. While it may not cause harm in sealed walls or ceilings, exposure to loose asbestos dust can cause serious health issues. Although the Australian government completely banned using asbestos-based building materials in 2003, houses built earlier may also have asbestos in the cladding or the ceiling for insulating and fireproofing.

Many home insurance policies do not cover asbestos removal. However, in some circumstances, insurers may still pay for its removal. For example, hail storms or falling trees can damage the roof or the walls of your home, causing the asbestos to become more likely to release fibres. If your home insurance covers hail storms or tree damage, your insurer may pay for asbestos removal. Having said that, a better option is to check with an insurance company to see if they cover asbestos removal before purchasing their home insurance policy.

In general, when living in an old home, you need to take precautions to make sure you don’t accidentally cause asbestos materials to crumble. You should also plan for regular maintenance to prevent wear and tear to any areas containing asbestos.

Does home insurance cover accidental damage?

Home insurance offers cover for any damage to your house and most policies cover the main building, garage, permanent attachments, and other external buildings that can be locked. 

Every insurance policy lists the defined events that will be covered, such as fires, floods, lightning strikes, theft, or falling trees. A few may also offer the option of accidental damage home insurance cover for other possible mishaps and unintentional damage around the home, such as when the dog knocks over the TV, or when red wine is spilled on the carpet.

The home insurance accidental damage cover is available only for the address provided at the time of buying the policy. 

Does home insurance cover tenant damage?

If you have a property that you rent out to tenants, you may ask, does home insurance cover tenant damage? Generally, as a landlord, you’ll require a different type of insurance policy than a regular home and contents insurance that offers coverage for the unique situations faced by landlords.

Landlord insurance

As a landlord, you must insure against additional risks to protect your investment. A landlord home and contents insurance policy covers loss due to natural disasters, storm, and fire. Generally, it also covers fixtures like stovetops, light fittings, window coverings, carpets, and ovens.

Additionally, you may protect yourself against any loss arising due to damage to your property caused by your tenants or their guests. Some landlord insurance policies may also protect you against financial loss due to unpaid rent.

Does homeowners insurance cover tenant damage? In most cases, regular homeowners’ insurance policy will not cover such damage. It’s always best to refer to the product disclosure statement (PDS) to clearly understand what is included and excluded from your home insurance policy.

How do you compare home insurance rates?

When you compare the home insurance quotes offered by various Australian insurers, consider looking at the type of coverage they offer as well as coverage limits and exclusions. You can choose an insurance policy which covers either the total replacement cost, which is the actual cost of rebuilding your home from scratch, or a fixed insured sum, which is an estimate of the cost to rebuild. The home insurance policy is likely to cost you more if you go for the total replacement cost coverage.

Your insurance policy’s exclusions and coverage limits usually depend on how exposed your home is to adverse events like floods and bushfires. It also tells you the maximum compensation that your insurer is likely to pay for damage caused to your home. If you live in an area with a greater incidence of crime or disasters, your insurance policy will likely cost you more.

The amount you actually pay for home insurance can be adjusted by agreeing to a higher excess, which is what you will pay over and above the insured amount from your own pocket. You should consider using the online calculators provided by various insurers to check how different coverage limits affect your insurance premium.